In Microsoft’s Q2 report, the tech giant beat estimates but saw its stock drop double digits. Concerns arose over capital expenditures for AI infrastructure, slowing consumer business growth, and declining margins. The stock now trades at a P/E of 25.

Despite strong Q2 results, Microsoft’s stock fell as investors worried about future growth and capital spending. Azure revenue increased by 39%, but flat revenue guidance for Q3 led to skepticism. The stock’s double-digit sell-off may be an overreaction, as it still holds competitive advantages and growth potential.

Investors are questioning Microsoft’s AI strategy, causing the stock to drop more than 20% from its peak. However, with mid-to-high-teens revenue growth expected and a lower P/E ratio compared to the S&P 500, Microsoft looks like a strong buy opportunity at its current valuation. Consider the long-term potential before investing.

Read more at Nasdaq: Microsoft Just Hit an 8-Month Low. Is the AI Stock a No-Brainer Buy Right Now?